How Market Segmentation Drives Engagement
Our introduction to market segmentation gives you some basic insight into what it is and how it works. We have also shared some tips on the market segmentation mistakes that may be holding you back, and if you would like to learn more on how to get more effective results from your segmentation strategies, you can download our tip sheet here. If you were ever wondering how this aspect of marketing automation can actually drive engagement, keep on reading to see how segmentation can help you create highly targeted, relevant campaigns that are designed to convert at every step of the way.
Often compared (and sometimes confused) with target marketing, market segmentation is typically used in mobile and email marketing to deliver targeted, often personalised messages to audiences. Unlike target marketing, which gives a broad overview of your target audience, segmentation goes a little deeper into the demographics, location, interests, and behaviours of your audience. It also works hand in hand with your lead nurturing strategies, to help you create a lead funnel that is highly targeted to deliver maximum engagement.
How exactly does segmentation help you increase your engagement? Let’s take a look.
Increasing Engagement with Market Segmentation
Trying to increase customer engagement? Depending on what you focus on, there are a few ways that you can segment to drive engagement. Some of the ways to segment your lists include:
In the world of email marketing, you have a great deal of information on hand about each customer who visits your website or store. Imagine if real life customers in a brick and mortar store had labels showing whether they were new customers, returning customers, non-purchasing customers or frequent shoppers? It goes without saying that each of these customers would likely be treated differently, rather than treated exactly the same. A brand new customer has very different needs to a frequent shopper, after all.
With marketing automation, these labels are added to every visitor. This level of data is incredibly helpful – especially when you are trying to engage with different customers who are at different stages of the buying cycle. Segmentation allows you to create highly targeted messages for different customers. For a brand new customer, you might have a once-off discount, a selection of popular items or a welcome message. For a customer who has visited your shop often without making a purchase, you may have a dedicated offer, or a selection of items that they have viewed without purchasing. A frequent shopper meanwhile might have their favourites shown, or new items in a category that they often browse. By segmenting your customers into new, potential, loyal and even advocates, you will see a far better level of engagement.
You may also want to consider additional demographic data that further allows you to target your ideal customers easily and effectively. Age, gender, location, job, and salary are just ways to target on a deeper level. Even choosing something as simple as gender along with your customer profile can be effective. In a Marketing Sherpa case study, clothing brand Johnny Cupcakes noticed a 42% increase in clicks, 123% increase in conversions, and 141% increase in revenue, just from breaking down their segments by gender.
This ties in very closely with customer demographics and behaviour. A sporting good online shop caters to a wide variety of customers of various ages, sporting preference, locations, genders, jobs, and income ranges. Such a store would have browsing customers who have not yet purchased, new customers who have converted, regular customers and brand advocates. One way to effectively target a diverse store like this is to use interests as a primary criteria for segmentation.
Segmenting a very diverse store according to age, gender and demographics may end up having less engagement than segmenting it by interests and behaviour. Every product category gives you plenty of insight into the interests of specific customers. Using the sports store example, you would have customers who play rugby, customers who play tennis, customers who do home fitness, customers who practice yoga, customers who practice martial arts or contact sports, customers who golf, customers who swim and customers who rug or jog, to use just a few typical categories. You would also have those who are interested in clothing or footwear rather than equipment, and vice versa.
Interest based segments are a very useful strategy for businesses that have a diverse offering. Some of the ways that customers can be effectively targeted by interests include click-based offers relating to products that customers have shown interest in from previous emails, lead magnets based on subscriptions, items purchased, items viewed, items favourited, and items wishlisted. It is a good idea to link interests to behaviour however. Knowing whether a customer is purchasing a product as a gift or for themselves is key to generating engagement based on interests. Consider whether people are interested in a single product or section, how they use your product, what they buy, how often they click on email links, and when and how often they buy.
To increase engagement, you need to fine-tune your market segmentations around engagement and activity. Going back to our first point about the different types of customer, you will soon see which customers are either ready to engage or already engaged with your offers.
Everyone has received a ‘we miss you’ type email from a product, service or app that is no longer being used. Creating segments for active and inactive users can be an effective way to bring back those who are not engaged. You may segment these into customers who have not responded in three months, six months and year, for example. You can then target these customers in a way that is designed to re-engage them – you might offer a special discount, an exclusive resource or you may ask them to tell you why they left. If no response is given within a set time-frame, you can remove these users from your list. This will help you focus your resources on those who are either fully converted, or well into the lead funnel heading towards conversion.
How to Boost Engagement After Market Segmentation
You’ve segmented your lists…now what? Some simple strategies to get the most from your messages after market segmentation include the following:
- Keep messages concise. You have the perfect opportunity to reach your ideal customer, who is already primed to convert. Make sure that you keep your messages short and simple to get the most from your email campaigns. Don’t forget to think carefully about your email subject line, too!
- Personalise messages. Personalisation is a very effective strategy that works very well with market segmentation. You have already personalised your messages by segmenting your customers according to specific criteria. Now you can go one step further by referring to recipients by name and crafting subject lines and email content that are highly tailored.
- Educate and inform. According to Marketing Sherpa, 40% of subscribers mark email as spam simply when the content is not relevant. Make sure that you deliver messages that are truly useful and relevant to your segments, and look out for these less-than-ideal email marketing practices. This is easily the simplest way to maintain engagement.